Economy
Australia’s central bank delivers 3rd straight rate hike
Australia’s central bank hiked interest rates for a third time this year on Tuesday, returning borrowing costs to post-pandemic highs and warning of sticky inflation as the conflict in the Middle East led to a global oil shock.
Governor Michele Bullock said the board now judged monetary policy to be slightly restrictive after a burst of rate hikes this year, allowing the board to pause and gauge inflation and growth risks linked to war.
Wrapping up the May policy meeting, the Reserve Bank of Australia (RBA) raised its main cash rate by 25 basis points to 4.35%, undoing all of the three rate cuts made in 2025. The board voted 8-1 in favor of the hike, a hawkish shift from March’s narrow 5-4 split.
Bullock said there were early signs that firms were looking to pass through rising costs to customers, and that three rate hikes should help keep inflation expectations anchored.
“We feel we are now in a position where we have got space to be alert to both sides of the risks, the inflation and potential risks to the downside, if the war continues,” she said at the post-decision press briefing.
The Australian dollar slipped 0.3% to $0.7145, while three-year government bond yields fell 5 basis points to 4.625%, the lowest in two weeks, as markets scaled back the odds of more near-term rate hikes.
Swaps imply around a 15% chance of a further move in June. An increase to 4.60% by September is about fully priced, which would be the highest since late 2011.
“Higher fuel prices are adding to inflation and there are indications that this is likely to have second-round effects on prices for goods and services more broadly,” the board said in a statement.
“The board assessed that inflation is likely to remain above target for some time and that the risks remain tilted to the upside, including to inflation expectations.”
Yet the RBA also emphasized that having raised the cash rate three times, “monetary policy is well placed to respond to developments,” hinting it might pause for now.
Inflation had already climbed to 4.6% in March, driven by higher fuel costs, while the closely watched core measure remained uncomfortably above the RBA’s 2%-3% target band.
The oil price spike triggered by the U.S.-Israeli war on Iran saw the RBA sharply raise its forecasts for inflation this year, tipping a peak near 5% while cutting the outlook for economic growth and employment.
Hormuz risk
“Today, the Board showed a clear preference to prioritize the price stability mandate. There is a strong message in this outcome, meaning that risks are biased towards a further adjustment in the cash rate,” said Sally Auld, chief economist at the National Australia Bank.
“For now, we have the RBA on hold at 4.35%.”
The RBA charted a softer course than its global peers during the post-pandemic inflation surge, prioritizing hard-won gains in the labor market over rapid tightening. Interest rates peaked at 4.35% early last year before three cuts pulled them back to 3.6%.
That gamble backfired in the second half of the year as inflation reignited, a risk now supercharged by the Iran war and a fresh global energy shock. The U.S. and Iran launched new attacks in the Gulf on Monday, lifting Brent crude futures to $114 a barrel, up over 50% from pre-conflict levels.
Business and consumer confidence in Australia crashed on fears that the war may tip the economy into a recession, while the housing market has lost steam amid higher borrowing costs and geopolitical uncertainty.
The labor market remains the outlier, with the jobless rate holding at a historic low of 4.3%.
The outlook hinges on the Strait of Hormuz, a vital route for about 20% of global oil flows, which Iran has effectively closed since the war began in late February.
“By August – in the absence of a rapid resolution to the conflict in the Middle East and a resumption of oil flows – we expect the activity data in Australia to be looking sufficiently soft to keep the RBA on hold,” said Adam Boyton, head of Australian economics at ANZ.
The U.S. will impose a 25% tariff on most imports from Brazil starting July 22, the U.S. Trade Representative’s office said on Wednesday, the first action under the Trump administration’s new tariff strategy that could eventually affect dozens of countries.
The new program, launched after the U.S. Supreme Court tore down the centerpiece of Trump’s tariff system earlier this year, is based on investigations into unfair trade practices under Section 301 of the U.S. Trade Act.
Close to 80 trade investigations have been opened by the USTR office and a new wave of tariffs could be imposed on dozens of countries, including China, the EU, India, Japan, South Korea and Mexico.
Wednesday’s announcement follows a proposal by the Trump administration in June to impose a punitive tariff of 25% on many imports from Brazil after deciding its practices were unfair on a range of issues from digital trade to illegal deforestation.
“Extensive negotiations with Brazil over the past year have not resolved these issues, but we remain open to continuing negotiations with Brazil to bring about long-needed changes to the problems identified in this investigation,” U.S. Trade Representative Jamieson Greer said in a statement.
Brazilian President Luiz Inacio Lula da Silva said the U.S. decision was without any justification.
Brazil would immediately begin proceedings to invoke instruments provided for under the “Reciprocity Law” and revisit the matter within the framework of the WTO dispute settlement mechanism, he said on X.
U.S. Secretary of State Marco Rubio, who was accused by Lula of being anti-Latin America when the U.S. tariffs were proposed in June, blamed the Brazilian president and said, “Lula and his government have not negotiated with the U.S. in good faith.”
“For the past year, Lula has put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that,” Rubio said in a strongly worded post on X.
The tariffs would apply to thousands of Brazilian imports, including sugar, agricultural machinery, apparel, electrical machinery, paper and steel.
The U.S. said it would exempt all the products proposed for exemption in the June notice, except high-purity dissolving pulp and non-pharmaceutical applications of certain products.
The exemptions include beef, coffee, rare earths, energy products, aircraft and aircraft parts.
The U.S. also added organic honey, pig iron, unflavored instant coffee and some other products to the list of exemptions on Wednesday.
The investigation into Brazil, opened last July, cited several alleged unfair practices, including illegal deforestation and Brazil’s instant payment system, Pix, which the U.S. government argues disadvantages credit card companies.
Brazil vehemently rejected all the allegations.
Brazil has also been included in a separate Section 301 investigation by the USTR, due to conclude on July 24, into connections to forced labor in the supply chains of dozens of countries.
The probe is expected to result in an additional 12.5% tariff, bringing the total burden for Brazilian products to 37.5%.
Hungary’s former foreign minister has resigned his seat in parliament and taken an executive position with Chinese electric vehicle maker BYD, he announced in a social media post on Wednesday.
Peter Szijjarto, who served as Hungary’s top diplomat for nearly 12 years in the government of former Prime Minister Viktor Orban, wrote on Facebook that he had received “a highly prestigious offer” from the world’s top electric carmaker “to fill an international position.”
“BYD is one of the greatest success stories in the automotive industry over the past 20 years,” Szijjarto wrote. “Starting today, I will continue to work as the executive responsible for the group’s external relations and the development of new business lines.”
Szijjarto lost his position as foreign minister after Orban and his far-right Fidesz party lost a landslide election in April to the pro-European Tisza party and its leader, Prime Minister Peter Magyar.
Since then, Szijjarto had been absent for most parliamentary votes and rarely appeared in public or posted on social media. He has held a seat in Parliament since 2002.
In 2023, Szijjarto announced that his now-employer BYD would open its first European factory in Hungary – allowing the conglomerate to skirt European Union import tariffs on Chinese electric vehicles imposed to protect the continent’s domestic auto manufacturing sector.
As Hungary’s foreign affairs and trade minister, Szijjarto played a central role in talks with BYD on bringing the plant to Hungary, and said at the time that the decision came after 224 rounds of negotiations between the company and Hungary’s government.
Szijjarto called the project “one of the largest investments in Hungarian economic history,” and said the government would provide financial incentives to BYD for building the plant.
While in office, Szijjarto and Orban opposed EU tariffs against Chinese products and sought major investment from Beijing, opening a series of Chinese EV battery manufacturing plants across the country.
Orban’s government and Beijing also jointly developed a rail corridor between Hungary and Serbia that is part of China’s “Belt and Road” global trade initiative.
While foreign minister, Szijjarto maintained close relations with Russia despite its full-scale invasion of Ukraine on Feb. 23, 2022. Breaking with nearly all of his EU counterparts, he frequently traveled to Moscow to negotiate agreements on purchasing Russian oil and gas, and to meet with Russian Foreign Minister Sergey Lavrov, whom he referred to as his “friend.”
Szijjarto was awarded the Russian Order of Friendship in 2021 by President Vladimir Putin, one of the highest state honors that can be received by a foreign citizen.
He was embroiled in controversy during Hungary’s 2026 election campaign when The Washington Post reported that he made regular phone calls to Lavrov during high-level EU meetings with “live reports on what’s been discussed.”
Szijjarto dismissed the report while acknowledging that he conferred with Lavrov before and after EU foreign minister meetings about their agenda and decisions.
In March, Orban’s government launched espionage charges against a prominent Hungarian investigative journalist for activities he carried out while investigating Szijjarto’s communications with Lavrov. Those charges were dropped after Hungary’s new government took office.
Ukraine’s Parliament ratified the free trade agreement (FTA) with Türkiye on Tuesday, a key step toward the pact’s entry into force and paving the way for deeper economic ties.
The agreement was signed during President Recep Tayyip Erdoğan’s visit to Ukraine in February 2022. It completed Türkiye’s ratification process in 2024.
“Another historic milestone has been reached in the Türkiye-Ukraine Free Trade Agreement,” Trade Minister Ömer Bolat said.
Bolat added that the Ukrainian Parliament’s approval opens a door to “a new era of economic and trade cooperation” between the two countries.
The agreement is expected to enter into force after being signed by Ukrainian President Volodymyr Zelenskyy.
Bilateral trade between Türkiye and Ukraine reached $6.2 billion in 2024 and increased to $6.6 billion in 2025, according to official data.
Trade rose a further 10% year-over-year in the first half of 2026 to around $3.2 billion.
Under the agreement, around 90% of bilateral trade will be liberalized on a reciprocal basis, Bolat said, adding that it will boost the competitiveness of Turkish exporters in the Ukrainian market.
The minister said the agreement would also facilitate trade in services, strengthen logistics operations, support Turkish contracting services and provide a more transparent and secure legal framework for reciprocal investments.
Bolat said the deal would bring the two countries closer to their jointly declared target of increasing bilateral trade to $10 billion, a goal set by Erdoğan and Zelenskyy.
The two leaders met in April, before Zelenskyy arrived in Ankara last week for the NATO summit.
Meanwhile, Foreign Minister Hakan Fidan was due to arrive in Kyiv on Wednesday, in a visit expected to focus on strengthening bilateral ties, advancing efforts toward a lasting peace, and enhancing regional security.
Fidan last visited Ukraine in late May 2025. He was scheduled to be received by Zelenskyy on Wednesday and hold meetings with Foreign Minister Andrii Sybiha, Presidential Office head Kyrylo Budanov and National Security and Defense Council Secretary Rustem Umerov.
During the meetings, Fidan was expected to discuss steps to deepen the Türkiye-Ukraine strategic partnership and expand cooperation in areas including economy, energy, and defense.
He is also expected to stress the importance of sustaining diplomatic efforts toward a lasting peace in Ukraine and reiterate that Türkiye remains ready to bring Ukraine and Russia back to the negotiating table.
NATO member Türkiye has sought to maintain good relations with its warring Black Sea neighbors, pitching itself as a key go-between and possible peacemaker between the two.
It has played a role in brokering several prisoner swap deals between Russia and Ukraine and helped put in place a deal in 2022 to ensure grain could be shipped safely from Ukraine’s Black Sea ports. The accord remained in effect for a year.
Istanbul was the venue of peace talks between Russia and Ukraine in the early weeks of the conflict four years ago.
Türkiye increased foreign arrivals by 21% between 2019 and 2025, making it the fourth-fastest-growing destination among leading tourism markets, according to an Organisation for Economic Co-operation and Development (OECD) report.
International tourist arrivals across OECD countries reached a record 847 million in 2025, up an estimated 3.4% from a year earlier, extending the sector’s recovery after an 8.1% increase in 2024, the OECD said in its Tourism Trends and Policies 2026 report.
The report noted that geopolitical tensions, conflicts in the Middle East, shifting travel preferences and extreme weather events continue to shape the global tourism outlook.
Security concerns, rising travel costs and uncertainty over cancellations have encouraged travelers to favor familiar and lower-cost destinations, while airlines and tourism operators are reassessing plans for 2027 and beyond.
Among countries that surpassed pre-pandemic tourism levels, Japan recorded the strongest growth in international arrivals between 2019 and 2025, with a 34% increase, followed by Norway at 28% and Denmark at 22%.
Türkiye ranked fourth with a 21% rise in international visitor numbers, placing it among the countries that have expanded tourism demand most significantly since before the COVID-19 pandemic.
The OECD said roughly one-third of member countries expect tourism performance in 2026 to exceed 2025 levels and set new records, although geopolitical risks, economic uncertainty and climate-related challenges remain key concerns for the industry.
Firuz Bağlıkaya, chair of the Association of Travel Agencies of Türkiye (TÜRSAB), said tourism is among the sectors most sensitive to geopolitical developments, health crises, natural disasters and economic volatility.
“Türkiye has a strong tourism ecosystem that has successfully managed numerous global and regional crises,” Bağlıkaya said, attributing much of that resilience to the experience of travel agencies and industry stakeholders.
He said the industry’s future growth should be measured not only by visitor numbers but also by spending per tourist, average length of stay, sustainability of tourism revenues and overall contribution to the economy.
Türkiye welcomed a record 52.78 million foreign tourists in 2025, while total visitor numbers rose to a new all-time high of 63.94 million.
Tourism revenues increased 6.8% to $65.23 billion, surpassing the government’s Medium-Term Program (OVP) target of $64 billion.
For 2026, the government is targeting $68 billion in tourism revenue.
Tourism is a vital industry that Türkiye relies on to help flip its chronic current account deficit to a surplus. The sector contributes about 10% to the country’s gross domestic product (GDP) and accounts for about 5% of total employment.
TÜRSAB’s Bağlıkaya said Türkiye should focus on expanding higher-value tourism segments, including cultural, gastronomic, health, convention, sports, faith-based, cruise and rural tourism, to spread tourism activity throughout the year and increase visitor spending.
He added that Türkiye’s goal of generating $100 billion in tourism revenue will require a greater emphasis on quality and value creation rather than volume alone.
Bağlıkaya also highlighted cruise tourism as one of the highest-spending segments and said Türkiye could strengthen its position by integrating its cruise ports more closely with Istanbul Airport, one of the world’s leading aviation hubs.
The steady growth and interest in health care services in Türkiye earned the country some $761.5 million in revenue in the first quarter of the year, the head of a leading association said on Wednesday, noting that it welcomes health tourists from nearly 180 countries.
Türkiye has emerged as one of the most preferred destinations for international patients, welcoming health tourists from Europe, the Middle East, the Balkans, Turkic republics and North Africa, among many other regions.
The country offers services across a wide range of medical specialties, including aesthetic and plastic surgery, hair transplantation, dental treatments, ophthalmology, orthopedics and traumatology, cardiology and oncology.
Mustafa Eröğüt, board member of the Service Exporters’ Association (HIB) and chairperson of its Health Care Services Committee, told Anadolu Agency (AA) in remarks published on Wednesday that Türkiye has demonstrated steady growth in health tourism in recent years.
“In 2025, the number of people visiting our country to receive health care services reached 1,398,580, while revenue generated from health tourism totaled $3.022 billion,” he said.
Eröğüt also noted that the positive momentum has continued this year.
“In the first quarter alone, 302,487 international patients received health care services in Türkiye, generating $761.5 million in health tourism revenue.”
“More importantly, average health tourism revenue per patient increased by around 39% compared with the same period last year, showing that Türkiye is evolving into a destination that not only attracts more patients but also generates higher value-added healthcare services,” he maintained.
He emphasized that the sector prioritizes quality-driven growth as much as patient numbers, adding that the strong increase in per-patient revenue reflects growing global demand for Türkiye’s advanced health care infrastructure, internationally accredited medical institutions and highly qualified health care professionals.
Rising demand from Central Asia
Eröğüt said the country’s goal is to further strengthen Türkiye’s competitiveness in international health care services by increasing the number of foreign patients and boosting health care service exports.
“We welcome health tourists from approximately 180 countries, particularly from Europe, the Middle East, the Balkans, the Turkic republics and North Africa. Germany, the United Kingdom, Iraq, Azerbaijan, Russia, Libya and the Gulf countries remain among our largest source markets,” he said.
“At the same time, we have observed a notable increase in demand from Kazakhstan, Uzbekistan and other Central Asian countries in recent years,” he added.
He also noted that the sector aims not only to expand in existing markets but also to establish a lasting presence in new ones.
“In this context, sub-Saharan Africa, the Gulf region, Eastern Europe, Central Asia and North America offer significant potential. Through our promotional efforts, we are focused on strengthening Türkiye’s brand recognition in global health tourism,” he said.
High demand for cosmetic surgery, advanced treatments
Eröğüt pointed out that one of Türkiye’s greatest strengths is its ability to provide world-class health care across a broad range of specialties.
“The areas attracting the greatest interest from international patients include aesthetic and plastic surgery, hair transplantation, dental treatments, eye care, orthopedics and traumatology, cardiology, oncology, IVF treatments and bariatric surgery,” he explained.
He also noted that Türkiye ranks among the world’s leading health tourism destinations, with more than 1,500 health care institutions across over 40 cities, including hundreds of internationally accredited medical centers.
According to Eröğüt, international patients are drawn to Türkiye because of its high clinical success rates, advanced medical technology, experienced physicians and treatment costs that are between 40% and 70% lower than in Europe.
Still, he said that their goal is to position Türkiye “not only as a cost-effective destination but as a globally recognized health care brand distinguished by reliability, quality, advanced technology and patient satisfaction.”
Eröğüt also emphasized that effectively combating unregistered operators is essential to protecting Türkiye’s international reputation in health tourism.
Finally, he advised international patients to ensure that the health care provider or intermediary agency they choose is officially authorized, to secure all treatment services through written contracts, and to avoid unregistered intermediaries that operate solely through social media.
Türkiye’s strong diplomatic and commercial ties with the countries members of the Gulf Cooperation Council (GCC) have positively reflected on recent trade figures, as exports to the region surged 35.7% on a yearly basis to surpass $826 million last month, according to a report on Wednesday.
Türkiye continues to strengthen ties with the six member states of the GCC, Saudi Arabia, Kuwait, the United Arab Emirates (UAE), Qatar, Bahrain and Oman, as part of its diplomatic outreach across both neighboring and distant regions.
Accordingly, exports to Gulf countries in June rose 35.7% year-over-year to $826.8 million, compared with some $609.2 million in the same month last year, a report by Anadolu Agency (AA) indicated.
The exports to the Gulf countries posted notable growth despite the U.S.-Israel-Iran conflict and tensions in the wider region.
Moreover, during the January-June period, Türkiye’s exports to the six Gulf countries reached approximately $4.1 billion.
On the other hand, according to data compiled by AA from the Türkiye Exporters Assembly (TIM), the country’s overall exports totaled $24.94 billion in June, up 21.8% from the same month last year.
Among the Gulf nations, Saudi Arabia was the largest export market with $425.2 million, followed by the UAE with $295.6 million, Kuwait with $34.7 million, Qatar with $34.2 million, Oman with $29.1 million, and Bahrain with $8 million.
Exports to 4 Gulf countries increased
Saudi Arabia recorded the largest increase in export value in June compared with the same month in 2025, rising by approximately $229.8 million.
Oman followed with an increase of $13.5 million, Kuwait $8.2 million, and Qatar $7.4 million.
Exports to Bahrain declined by $567,000, while shipments to the UAE fell by $40.8 million during the same period.
The jewelry sector ranked first among Türkiye’s exports to Gulf countries in June, totaling about $105.6 million. It was followed by chemicals and chemical products with $69 million, grains, pulses, oilseeds and related products with $59.2 million, electrical and electronics with $47.9 million, and machinery and components with $29 million.
Commenting on the figures, Halit Acar, the head of the Türkiye-Middle East and Gulf Business Council at the Foreign Economic Relations Board (DEIK), said the rise in exports despite regional geopolitical developments showed that economic ties between Türkiye and Gulf countries had become more resilient and sustainable.
Acar said the intensive diplomatic engagement in recent months had produced positive results for trade, noting that Türkiye’s close political dialogue with Gulf countries and particularly Iraq had created new opportunities for the private sector.
He also stressed that a climate of trust was just as important as economic indicators for sustaining trade.
“Looking ahead to the second half of the year, two key scenarios stand out,” Acar said.
“If the regional security environment improves further, we expect postponed investments to regain momentum, accelerating exports, particularly in construction materials, machinery, electrical equipment, healthcare, food and logistics,” he added.
“Even if current geopolitical risks remain under control, we believe the Gulf countries’ strong fiscal positions will help preserve public investment and trade growth.”
Saudi Arabia has become Türkiye’s largest Gulf export market and the country recording the strongest export growth, Acar said, attributing the performance not only to improving bilateral economic ties but also to the kingdom’s Vision 2030 program.
Acar also noted that the UAE remained Türkiye’s second-largest Gulf market, with $295.6 million in exports in June.
“Although exports declined by around $40.8 million on a monthly basis, we do not consider this a lasting trend,” he said.
He added that the UAE continues to serve not only as its own domestic market but also as a regional trade and re-export hub for Africa and Asia, and expressed confidence that the Comprehensive Economic Partnership Agreement (CEPA) between Türkiye and the UAE would further boost bilateral trade.
Momentum to build with stronger partnerships
Furthermore, he said it is no longer “sufficient” to look at the relations with Gulf countries solely through export figures, as he suggested that the region is entering “a new phase shaped by investment partnerships, industrial cooperation and emerging logistics corridors.”
“Given Türkiye’s manufacturing strength, engineering capabilities and geographical advantage, we expect trade with Gulf countries to maintain its current momentum in the second half of the year and become even stronger through new partnerships,” he added.
In addition, he also pointed out that progress on the Development Road project is expected to deepen economic ties between Iraq and the Gulf countries, with Türkiye positioned as one of the key stakeholders in the emerging trade corridor.
FETÖ members enjoy freedom in US after plot against Türkiye
BREAKING NEWS… ‘New party’ statement from Özgür Özel! Even the name is obvious: “The official step will be taken at the end of July, the beginning of August!
US to levy 25% tariff on most imports from Brazil
FETÖ members enjoy freedom in US after plot against Türkiye
BREAKING NEWS… ‘New party’ statement from Özgür Özel! Even the name is obvious: “The official step will be taken at the end of July, the beginning of August!
US to levy 25% tariff on most imports from Brazil
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